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House Democratic leaders announced that a bill designed to tax the bonuses out of existence will come to the House floor Thursday, mere days after the news of the $165 million payout to employees of the embattled American International Group.

The legislation would levy a stiff 90 percent tax on bonuses paid by any financial firm receiving more than $5 billion in federal funds from the Troubled Asset Relief Fund.

“What happened with these bonuses was a mugging on Wall Street,” said Rep. Steve Israel (D-N.Y.), who worked on the legislation. “When you get mugged you want two things to happen. You want justice and you want your money back.”

“We’re just not going to say that we’re not going to anything” about irresponsible Wall Street executives getting bonuses with taxpayer money, said House Ways and Means Chairman Charles B. Rangel.

The $5 billion bar set by the legislation is not very high considering the piles of cash the government has poured into financial institutions since the fall. Indeed, it would hit banks such as J.P. Morgan Chase, which took the TARP money only at the insistence of then-Treasury Secretary Henry Paulson to ensure that the bank rescue plan would work.

The legislation would only affect employees whose total family income exceeds $250,000 per year, and would cover all bonuses received after Jan. 1, 2009.

Asked why they didn’t impose a full 100 percent tax on the bonuses, Rangel said he “figured that the local and state officials would take care of the other 10 percent.”

House Majority Leader Steny Hoyer (D-Md.) said he expected the bill to pass with overwhelming bipartisan support. He and Pelosi also said they’re working on additional legislative responses to the executive compensation issue.

Why is Congress moving?! Why is PELOSI so silent! She was instrumental in getting this thing passed!

THE DEMOCRAT CONTROLLED HOUSE AND SENATE ENSURED THIS THING WAS PASSED! We are just finding out the consequences to this inthe past few days.....IMAGINE what the consequences to the stimulus bill will lead to!! You know...the one that has over 9000 pork projects!

Obama Urges Congress Not to Block the Bailout

By Jay Newton-Small / Washington Wednesday, Jan. 14, 2009

Obama Lobbies Senators on TARP Money, Stimulus Plan (Update4) all

By Kristin Jensen and Brian Faler

Jan. 13 (Bloomberg) -- President-elect Barack Obama lobbied Democratic senators today as he seeks to build support for his economic stimulus proposals and for tapping the second half of a $700 billion financial-markets rescue fund.

I'm so relieved the Democrats have nothing better to do with their time. I just wish someone would take a look at their full-time salaries for part-time work, indefensible pensions, and gold-plated taxpayer funded health care.

I agree the bonuses should be rescinded on the grounds that AIG essentially went bankrupt, but this class warfare must stop, and it must stop NOW. If you are going to tax away the bonuses, then tax them away for everyone, not just those making over $250k. The dems are getting out of hand with this attack on the 'rich'.

Sen. Chris Dodd (D-Conn.) looks like he may be facing a fresh political firestorm.

Dodd just admitted on CNN that he inserted a loophole in the stimulus legislation that allowed million-dollar bonuses to insurance giant AIG to go forward – after previously denying any involvement in writing the controversial provision. .

“We wrote the language in the bill, the deal with bonuses, golden parachutes, excessive executive compensation that was adopted unanimously by the United States Senate in the stimulus bill,” Dodd told CNN’s Wolf Blitzer this afternoon.

“But for that language, there would have been no language to deal with this at all.”

Dodd had previously said that he played no role in writing the controversial language, and was not a part of the conference committee that inserted the language in the bill. As late as today, Dodd’s spokeswoman denied the senator’s involvement.

The AIG bonuses have caused a political firestorm, with Republicans and Democrats alike looking to lay blame for who’s responsible, and leading lawmakers looking to revoke the bonuses.

Dodd’s role in the legislation will likely come up as he faces the likelihood of a tough re-election. Former GOP congressman Rob Simmons announced he was running this week, and has already taken issue with Dodd’s stewardship as chairman of the Senate Banking Committee.

There is a little proplem with this sudden burst of "don't get mad , get even". People in Congress once again have opened their mouth and inserted their foot. Even in their enthusiasm they are forgetting one small Constitutional fact. " Congress shall pass no Ex-post -facto Law ". The Bonuses have already been paid. They can only tax bonuses paid "after the bill is signed into law" .

Our elected officials ( most being lawyers ) seen to suprisingly ignorant of the Constitution and the protections written into it. I say to the Congress , Ignor it at your own risk. We the people are watching......HW 03.18.09

What a joke it is to watch the demagogue hypocrites in Congress lambasting AIG for bonuses that were a result of their Porkulus spending bill. The Congressional leaders inserted that language into the bill that permits the bonuses to happen.

This was done by consensus between the House, Senate at the insistence of Obama's Financial incompetents, Gaithner and Summers. Trying to place the entire blame on AIG is disingenuous. Why was that Bill given to The Congress at 10 PM the day before it was a done deal. It was do so by design, so as to ram-rod it through in in an effort to make it unexamined, unread and unstoppable.

Obama is fleeing town today, so he can pal it up with Jay Leno in LA on the Tonight Show. TERM LIMITS for Congress is the only change I yearn for.

Why not tax them at 100%? If the companies failed and needed propping up by the taxpayer, then they (the executives) certainly didn't do their job! They call them "retention" bonuses, which is sort of ironic. I'd give them twenty bucks and tell to get a cab and never come back. It will be interesting to see the Republicans put their money where their mouth is on this one. They're making a lot of hay over this but who thinks that they will actually vote to tax the bonuses? Me thinks they're gonna want to protect their Republican buddies who get these bonuses on the back of the hardworking taxpayer. My advice would be to not pay attention to all the false rage and cheap populism we are seeing in the 24 hour news cycle. Pay attention to how they vote on this bill.

OK so put yourself in this situation: You get hired to mow my lawn. We sign a contract. You mow my lawn as agreed to. Now it comes time for me to pay and I say "Nope. I am not going to honor that contract and I am not going to pay you." My neighbor is a judge and I get him to agree with me and he presides over the law suit and throws it out. How would you feel?all

THE DEMOCRAT CONTROLLED HOUSE AND SENATE ENSURED THIS THING WAS PASSED! We are just finding out the consequences to this inthe past few days.....IMAGINE what the consequences to the stimulus bill will lead to!! You know...the one that has over 9000 pork projects!

You apparently do not know the difference between the stimulus and the recently passed omnibus. The omnibus, had over 9000 earmark projects in it. 40% of this pork was authored by conservative Republicans for their own states and districts. When Republicans held the majiority that number was closer to 60% as is customery for the majority party. Republicans have absolutely no authority on this. Their hand are in the cookie jar as well.

There is a little proplem with this sudden burst of "don't get mad , get even". People in Congress once again have opened their mouth and inserted their foot. Even in their enthusiasm they are forgetting one small Constitutional fact. " Congress shall pass no Ex-post -facto Law ". The Bonuses have already been paid. They can only tax bonuses paid "after the bill is signed into law" .

Our elected officials ( most being lawyers ) seen to suprisingly ignorant of the Constitution and the protections written into it. I say to the Congress , Ignor it at your own risk. We the people are watching......HW 03.18.09

Under normal circumstances your analysis would hold true but here we have a situation where contracts and agreements may have been made fraudulently. In that case the contract would be void and the taxpayer has the right to see the funds returned to We the People.

OK so put yourself in this situation: You get hired to mow my lawn. We sign a contract. You mow my lawn as agreed to. Now it comes time for me to pay and I say "Nope. I am not going to honor that contract and I am not going to pay you." My neighbor is a judge and I get him to agree with me and he presides over the law suit and throws it out. How would you feel?all

In other words there was a contract which is a legal binding document. These executives who made bonuses have a legal right to them provided that they complied with the terms of the contract. I don’t like it but the ones that should be held accountable for this are the ones who agreed to the contracts. That would be the congress and this administration as well as Paulson and Bernace.

I doubt the Republicans would dare defend the contracts on the assumption you make. To do so would be suicide. There will be some heads on the guillotine soon and I'm guessing it won't be anyone in the administration. Actually, bringing back the guillotine isn't such a bad idea. It would give people an outlet to vent their rage, rather. They could set it up in Times Square. They could drag out all these papmered CEOs who have been raping the taxpayer, lay them face up and let it go! This is certainly hyothetical but it's what they actually deserve. We need a new Reign of Terror against Wall Street corruption.

Under normal circumstances your analysis would hold true but here we have a situation where contracts and agreements may have been made fraudulently. In that case the contract would be void and the taxpayer has the right to see the funds returned to We the People.

**Give back $165 million in post-bailout bonuses or watch Congress tax it away with emergency legislation.**

I heard the AIG office paying out the giant bonuses was in London. Beyond the reach of the IRS. Obama, Grassley, Reid - all that uproar from Washington yesterday in unison, was a little too scripted. The goverment has owned AIG since September -- found a cool site; Balkingpoints ; awesome satellite camera view of earth

I said the contracts "may" have been made fradulently. I don't know that they are (but I suspect something will be found) and you don't know that they're not, so stay tuned. If they are some irregularities Congress is obligated to protect the taxpayer.